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Bank customers are protected, but not investors, says Biden

The Fed has announced a review into Silicon Valley Bank and a new "Bank Term Funding Program.”

Photo by Tony Webster on Flickr / CC BY 2.0

On Monday, President Biden reassured Silicon Valley Bank and Signature Bank customers that their money is safe.

“All customers who had deposits in these banks can rest assured they’ll be protected and they’ll have access to their money as of today. That includes small businesses across the country that banked there and need to make payroll, pay their bills, and stay open for business,” said Biden.

The President emphasized that investors will not be protected, stating, “They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works.”

At the same time, the Federal Reserve Board announced that Vice Chair for Supervision Michael S. Barr is leading a review of Silicon Valley Bank. The review is to be released by May 1.

The Fed also announced a new “Bank Term Funding Program.” It invokes an emergency authority that “makes additional funding available to banks pledging any collateral eligible for purchase by the Federal Reserve Banks.”

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